Messy Margins, Broken Balance Sheets, and the Real Cost of Bad Bookkeeping

Episode Summary

In this episode of the Free to Grow CFO podcast, Jon Blair and Melissa Cafagna discuss the critical aspects of scaling a DTC brand with a focus on bookkeeping, accounts payable, and inventory management. They explore the challenges brands face in financial management, the importance of accurate financials for capital acquisition, and the common pitfalls in bookkeeping practices. The conversation also delves into the significance of understanding landed costs, the integration of AP with inventory management systems, and the impact of tariffs on DTC brands. A case study highlights how effective profitability analysis can lead to smarter business decisions.

Key Takeaways

-Integrating AP with inventory management systems improves accuracy.

-Accurate financials are crucial for capital acquisition.

-Effective financial management can alleviate stress for brand founders.

-Landed costs must be tracked accurately to understand true profitability.

Episode Links

Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/

Melissa Cafagna- https://www.linkedin.com/in/melissacafagna/

Free to Grow CFO - https://freetogrowcfo.com/

Settle - https://www.settle.com/

Meet Melissa Cafagna

Melissa Cafagna is a passionate advocate for mission-driven brands, known for her customer-focused approach and her role as a 'financing fairy godmother.' With extensive experience in the financial industry, she is dedicated to helping small businesses grow through innovative and personalized financing solutions. While living in Europe for three years, Melissa transitioned from finance and accounting to sales, gaining cultural insights and developing a dynamic empathy that shapes her approach to building relationships. In her free time, she enjoys spending time with her family, exploring Chicago’s beautiful parks and city centers, and immersing herself in hip-hop and R&B music. 

About Settle

Settle is the best way to power up your brand’s cash flow and operations—designed specifically for consumer brands ready to grow. With a unified platform tailored for 'finventory' management, you can seamlessly plan, purchase, manage, and pay for inventory, all in one place. Automate payments, 3-way match purchase orders, and real time accurate landed costs. For businesses that qualify, Settle Working Capital offers founder-friendly financing, so you can Settle now, pay later, and scale confidently. Join brands like Thread Wallets, Truvani, and Olipop to confidently scale for what's next. Learn more about Settle today.

Transcript

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00:00 Introduction to the Free to Grow CFO Podcast

02:03 The Importance of Bookkeeping in Scaling Brands

07:58 Challenges in Financial Management for Emerging Brands

13:59 Common Bookkeeping Issues Found in Brands

19:56 Integrating Inventory Management with Financial Processes

26:00 Streamlining Accounts Payable for Better Control

27:20 Segregation of Duties in Accounting

28:31 Understanding Landed Costs and Inventory Management Systems

33:30 The Importance of Accurate Profitability Analysis

39:29 Integrating AP with Inventory Management for Better Insights

44:00 Navigating Tariffs and Their Impact on DTC Brands

48:01 Case Study: Improving Profitability Through Data Analysis